Reconciling the need for financial value with social values that drive reputation

Creating value is the foundation stone of all business – to make or grow something, to provide a service, to improve daily life.

This is the drive that results in surplus that can be traded and that has resulted in the interdependent global market in which we live.

But there is more to what is ascribed a value. To paraphrase the Bible, “man does not live by bread alone”. We seek community, family, security and, for some, spiritual certainty and fulfilment. To achieve those ends in a civilised society we develop a set of beliefs, behaviours and ethics; a guide to our actions. We give those actions value, typically based on what we perceive the results to be either good or bad.

Whilst there may be some cultural relativity, the core social values that are supposed to guide most of us are fairly common. Honesty, respect, tolerance and fairness are seen as essential social values. Their importance is attested to by the distress and anger caused when any, or a combination of those values are demonstrably absent in the actions of others. That is why we characterise such behaviour as criminal and seek to punish it and stamp it out.

The modern global village is made up of individuals, states and corporations. In the developed world we expect the same social values to drive ethical and fair behaviour by all. We probably hold the non-individual actors (i.e. governments, corporations et al) to a higher standard, particularly given the disproportionate power they wield. Amongst those who state that with great power comes great responsibility are Winston Churchill, Theodore Roosevelt and Spiderman.

That is where companies can find themselves in major trouble. In the drive to create monetary value, shareholder value and personal value for executives, they may forget the imperative to fit within the prevailing social values. That is, there is a Values Deficit TM. When that happens corporate reputation can, and usually is, destroyed.

The 24-hour news cycle means that corporate misbehaviour will quickly gain broad exposure and, sadly, there is no shortage of examples. The result is that not only are organisations held to a higher standard, but the general disposition of most of the community towards them is inherently cynical.

To gain and maintain trust, companies must align their values to community expectation and not only live those values, but also be seen to live them. When that does not happen we regularly hear complaints about a negative and poisonous corporate culture. Complaints that can justify the business equivalent of a lynching, or, at the very least, a pelting with rotten fruit.

Not aligning with expected social values, yet still seeking to profit from the community that shares them, is the Values Deficit TM that can turn any business into a market pariah.

Any organisation that does not do a regular check of its values, the culture those create and assess if its actions and messages convey the desired values, runs a serious risk of drifting into a Values Deficit TM. The very nature of fast-paced competition can hasten that drift and create damage to reputation before it is even realised.

RMKA are highly experienced in working with organisations to assess expressed and lived values and to communicate values alignment with the communities and stakeholders that support any organisation’s licence to operate.

Vacuums are good for many things – including boiling water at zero degrees. What they are terrible for is selling a message.

Prime Minister Turnbull came to the leadership of the nation in September last year, loosing the hounds of national expectation. Understandably he did nothing to dampen those expectations that had fairly, or otherwise, been hitched to his wagon.

Six months is a long-time in most things; even longer in politics.

The national commentary now associated with his leadership will no doubt provide sobering reading for him and his advisors.

Upon considered reflection, it is the opinion of this business that our PM is guilty of failing to manage the conversation, which in turn has resulted a massive decline in his personal standing and a 50:50 split in the most recent newspoll.

So what happened?

The only conclusion that can be drawn is that the government instigated a conversation that it was not yet ready for. It kicked it off following the tried and true method of flying kites and selected leaks. All good so far; everything was on the table.

Australians could expect that complex and difficult reform would be calmly and rationally explained, and that the government would pursue the ‘right’ path as opposed to the politically expedient one.

It’s at this point in time some folks in the back office must have started to feel pretty uncomfortable. Increasing the GST was going to hurt too much (read: scare campaign on the horizon), and changes to super and negative gearing began tearing at the heart of a core constituency (read: conservative backbenchers).

Then there was silence.

Then the Opposition put out a policy.

Before the government knew it, it had lost control of a debate that it had should have had well within its grasp with plenty of good will and political capital to expend on driving it to the conclusion that the ‘nation needed.’

Simply put, the government appears to have been carried away with its potential to tackle a politically difficult problem and rushed into it without a clear pathway to explaining (and achieving) that task. En route, it ceded control of the discussion by creating a vacuum and allowing it to be filled by others with a somewhat different agenda to theirs.

Put another way, they went sailing without coordinates for the destination or the waypoints that they should have travelled by.

If we take a moment to compare and contrast here with one Donald Trump the difference is illuminating. Trump is so busy dropping bombs that none of his opponents (nor the media) have an opportunity to really lay a glove on him. He is leading a merry dance at an unprecedented tempo that does not permit anyone to get settled and really take him on. As an organisation, we do not advocate such a scatter-gun approach; it is however instructive to examine the techniques used across the political spectrum to maintain the initiative.

Ultimately the salient point is that if you are leading, you must know where you are going. There is never any reason, or excuse, to begin a journey before you are ready.

In the Australian context it is an opportunity lost for the nation. The saddest element of which is that it will likely take some kind of economic shock before tax-reform is meaningfully tackled again in the future.

This is not a piece about mindfulness. It’s a piece looking at the importance of delivering your message in a positive context.

Example one is Malcolm Turnbull.

Since being elected (by the Liberal Party) as Prime Minister on September the 15th this year the Australian mood has lightened a great deal. Why?

We ostensibly have the same policy settings that existed prior to MT’s elevation to the top job; it’s about jobs and growth, tough on borders, tough on terror (albeit with a more nuanced commentary), and a budget that is still in need of repair.

The economy has not miraculously turned around, it’s still “pitchy” and in a transition from the mining boom.

So what has changed?

It used to be the economy, stupid. Now it’s the manner in which the message is delivered.

Despite the somewhat hilarious appropriation of #ideasboom, the concept of embracing challenge, establishing policy settings that promote the very Australian pursuit of “having a go,” and accepting that failure is often the first step to success. Our public discourse is now framed in a remarkably different manner to that of the last 8 years.

The result; a nation that is more upbeat and a hope that is not based on “hard” data (if it was, one would expect to observe the status quo continuing), but based on being engaged in, and a part of, the discussion.

Update: I read with pleasant surprise earlier today in today’s The Australian (Shows potential but more work is needed, December 16, 2015) that Janet Albrechtsen agrees with my sentiment,writing:

Malcolm Turnbull earns early good marks too for setting a new tone and focus. Positive words are no substitute for good policy but there is undeniable power in a dose of upbeat leadership.

Example two is climate change messaging.

When the Paris climate talks were being discussed recently, an observation was made that the negative “doom and gloom” messaging was no longer gaining any traction in the public realm.

The conclusion reached was that people were simply sick and tired of the negativity associated with the issue. It didn’t mean that they were any less interested in climate change, nor were they any less interested in seeing action taken. The general consensus was that they wanted the discussion framed differently.

Both previous blogs published by RMKA and media commentary in the immediate aftermath of Tony Abbott’s demise commented on the Australian public’s lack of appetite for overtly negative and aggressive discourse.

The takeaway here is that if there is an opportunity to ‘be the statesman’ and frame your message in a positive light it will have greater cut through and success in the current climate.

It is not a safe assumption that a new broom will sweep away any controversial or sticky items on the predecessor’s agenda or that the new Ministry will immediately change the agenda on operational matters.

The business of government has a certain inertia and a change of administration, particularly one within the same party and one that has to rely on the loyalty of those who may not have supported the change, does not necessarily halt matters that are in-train. Where there has not been a change of Minister expect little immediate change. Where there has, expect that it will take some time before the new Minister’s influence, on anything other than matters that drive headline news, will become obvious.

For all the media excitement at a new era, it is still a Coalition Government with a clear eye on the need to get re-elected, probably sooner rather than later. The motivation to avoid conflict and mistakes is high. Worth remembering if you need to engage with our new Federal executive level of Government.